Pelatro Ltd Forensic Report - SOIC x StockScans Report

as of Jul 2026

Pelatro Ltd’s consolidated record is clean on audit, but the profit story lives in two foreign subsidiaries whose standalone health is weaker than the group numbers suggest. One of them carried negative reserves and relied on parent support until a capital infusion in FY25. Elsewhere, free cash flow has been negative for two years while dividends are paid, and the definition of recurring revenue is loose enough to make the top-line quality hard to judge.

Key findings

  1. Operating cash flow covers profit, but free cash flow is negative for two years while dividends are paid Minor - Consolidated cash from operating activities was ₹17.17 crore in FY26, yet net cash used in investing was ₹38.25 crore, leaving free cash flow negative at ₹5.41 crore. The Board recommended a final dividend of Re.1 per share for FY26, absorbing approximately ₹1.04 crore, and the same amount for FY25 when free cash flow was negative ₹16.85 crore. Other income of ₹4.83 crore represented 122% of profit before tax, with management attributing most of it to forex movement without splitting realised from unrealised gains.
  2. Revenue quality is clouded by blurred recurring definitions, rising receivables, and high customer concentration Minor - Management includes “gain share” in recurring revenue but does not disclose the amount recognised or how it is verified. Consolidated trade receivables rose to ₹21.79 crore in FY26, with receivable days at 83, while unbilled revenue climbed to ₹8.03 crore as at 31 March 2025 from ₹4.61 crore a year earlier. The top five customers represent 39-40% of revenue, yet no names or renewal dates are disclosed.
  3. Previous auditor resigned immediately after listing; replacement appointed for five years with no stated concerns Minor - M/s. Gnanoba & Bhat resigned as statutory auditors effective 3 October 2024, citing the company’s listing and enhanced reporting requirements as the reason. The outgoing firm confirmed no other material reason, no prior concerns communicated to the Audit Committee or Board, and no management-imposed limitation. M/s. P. Chandrasekar LLP was appointed for a five-year term from FY2025-26 to FY2029-30, and the CARO report confirmed no issues were raised by the outgoing auditors.
  4. A minor SEBI procedural fine was paid in FY25; no other regulator actions are disclosed Minor - Pelatro paid a fine of ₹10,000 to NSE for submitting voting results in PDF instead of XBRL format, and its waiver application was rejected. The FY26 and FY25 Board’s Reports state no significant or material orders were passed by regulators or courts impacting going concern or operations.
  5. Clean audit opinions across FY24-FY26 with no CARO exceptions, and the FY25 subsidiary going-concern emphasis was resolved by a capital infusion Clean - The statutory auditor issued unqualified opinions on standalone and consolidated financial statements for FY26, FY25, and FY24. The FY25 consolidated report carried an Emphasis of Matter, a special call-out in the audit report, on a subsidiary’s net capital deficiency of USD 1,280,044 and going-concern reliance on parent support; management infused USD 1,149,800 during that year, and the FY26 report contains no such paragraph. CARO confirms no fraud and no loan defaults in either year.

What to watch

Bottom line: This is a disclosed and audited record with no debt defaults, no fraud flags, and a clean governance trail on promoter dealings. The risk is structural: consolidated profit depends on subsidiaries whose standalone balance sheets have been thin, and the cash that operating activities generate is being absorbed by investment outflows before it reaches free cash flow. Watch whether the two large telecom contracts convert into cash without stretching receivables further, and whether the dividend clears shareholder vote while free cash flow stays negative.